Markets are jittery about the possibility the U.S. Federal Reserve might wind down its stimulus, but were steadied by data showing U.S. retail sales rose 0.6 percent in May, their strongest showing in six months. Also, the number of Americans seeking unemployment benefits was smaller than expected last week.

"Gains in US stocks overnight will help to calm sentiment," said Credit Agricole CIB analyst Mitul Kotecha in a report.

Japanese markets have weakened following a burst of euphoria over Prime Minister Shinzo Abe's economic turnaround plan. Markets had surged 50 percent since the start of the year but doubts are mounting about whether Abe's plan will work.

The Nikkei's plunge Thursday took the Japanese market to a 20 percent decline from its May 22 high—the definition of a bear market.

Markets have been uneasy since Fed chairman Ben Bernanke said the U.S. central bank might pull back on its $85 billion-a-month bond-buying program—known as quantitative easing—if U.S. economic data, especially hiring, improve.

Investors expect a reduction in the Fed's asset purchases later this year. Such stimulus has been a key driver of the rally in stock markets and other asset prices. Analysts say markets are looking ahead to next week's Fed policy meeting for more guidance on the scale and timing of any reductions.

"The markets now appear to be in panic mode over the prospect of a tapering of QE3 in the U.S., even though the Fed itself has stressed that monetary policy would remain 'highly accommodative'," said economist Julian Jessop of Capital Economics in a report.

Sentiment about China has turned pessimistic after May exports and retail sales weakened, fueling concern the recovery for the world's second-largest economy might be stalling.

News reports said Eurozone finance ministers were due to meet Friday in Rome to discuss possible support for banks. The Wall Street Journal said that might include agreement on using up to 60 billion euros to rescue financial institutions.

"Such a deal would likely be viewed as positive as other components of the banking union will take a long time before they are implemented in full," said Credit Agricole CIB's Kotecha.

In currency markets, the euro rose to $1.3349 from $1.3345 late Thursday in New York. The dollar rose to 95.07 yen from 94.87 yen.

Benchmark oil for July delivery fell 15 cents to $96.54 after gaining 81 cents on Thursday on improved U.S. economic data.

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